California regulators Thursday marched through a series of small, unanimous decisions dealing with rates and tariffs of the major energy utilities in the state, headed by the allocation of Southern California Edison Co.’s $9.2 billion revenue requirement to different classes of customers based on a comprehensive settlement agreement with 15 stakeholder groups.
In other actions, the California Public Utilities Commission okayed performance standards, open access gas tariffs, and a storage contract between Southern California Gas Co. and San Diego Gas and Electric Co.
The Edison rate action implements an earlier rate decision for the utility’s most recent general rate case. CPUC Commissioner Susan Kennedy praised the settlement, noting it was difficult to get 15 disparate groups to agree on anything, “let alone agree on how to balance the interests of consumer groups, industrial customers, federal agencies, farm bureaus and many others on how to allocate $9.2 billion in costs.”
In addition to agreeing on rate caps for added revenues from bundled utility customers and for direct access customers, the agreement is expected to streamline and simplify rate structures, which tend to be numerous and complex for all of the major investor-owned utilities. Kennedy called these “the kind of benefits that can only come when there is a broad settlement among the parties.”
For Sempra Energy’s two utilities, SoCalGas and SDG&E, the CPUC approved performance-based ratemaking (PBR) standards to remain in effect until the utilities’ next general rate cases. Everything except performance incentives and indicators were approved by the regulators, per another settlement among stakeholders.
Commissioner Geoffrey Brown called the settlement for the two utilities “a reasonable outcome.” Brown added that the regulatory commission “generally defers to the parties” when they reach a settlement, accepting compromises to litigated positions. He said the decision sets “reasonable targets and provides acceptable rewards and penalties” as part of the two utilities’ future incentive ratemaking programs.
In other action, Pacific Gas and Electric Co. was authorized to put its open access natural gas tariff in effect immediately, but SoCalGas and SDG&E were directed to refile their tariffs with modifications, and the tariffs were suspended pending certain required agreements being approved by the CPUC following the refiling. “When utilities require a rolled-in ratemaking procedure for certain projects, they need to distinguish those projects from others,” the CPUC Energy Division Director Sean Gallagher said.
In a second resolution, the regulators approved a gas storage contract between the two Sempra Energy utilities, SoCalGas and SDG&E, with the latter gaining storage from its sister utility since SoCal is the only provider of natural gas storage services in Southern California. The CPUC okayed a deal but at lower volumes and costs, so the San Diego retail customers pay comparable charges to what SoCalGas’ customers pay for storage.
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